Analys från DailyFX
US Dollar Higher as Gold, Oil and S&P 500 Race Downward
THE TAKEAWAY: The US Dollar has found fuel for a recovery from support as gold, crude oil and the SP 500 are accelerating downward to start the trading week.
US DOLLAR TECHNICAL ANALYSIS– Prices are correcting higher from falling channel resistance-turned-support set from early March (now at 10444). Near-term resistance is at 10546, the the 23.6% Fibonacci expansion, with a break above that exposing the 38.2% level at 10642. Alternatively, a reversal below 10444 aims for the April 2 low at 10391.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – Prices are sinking after putting in a Bearish Engulfing candlesick pattern below resistance at 1594.50, the 61.8% Fibonacci expansion. Sellers are now testing below support at 1583.90, the 50% level, with a break below that exposing the 38.2% Fib at 1573.30. Alternatively, a reversal above 1594.50 aims for the 76.4% expansion at 1607.70.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices are testing long-term support at 1397.50, the 100% Fibonacci expansion. A break lower on a weekly closing basis exposes the 123.6% level at 1303.50. The first layer of major resistance lines up at 1491.50, the 76.4% Fib.
Weekly Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices declined as expected after putting in a Bearish Engulfing candlestick pattern below resistance at the underside of a previously broken rising trend line set from the March 4 low. Sellers are now testing below support is at 88.77, the 100% Fibonacci expansion, with a break below that exposing the 123.6% level at 86.67. Near-term resistance is at 90.87, the 76.4% Fib.
Daily Chart – Created Using FXCM Marketscope 2.0
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— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
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EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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